Agrium, CF Industries, Terra Sales Pitches Continue

There’s not much lovin’ and a whole lotta of shaking — that’s shaking off offers — between CF Industries, which is fighting a takeover bid from Agrium and Terra Industries, which has rejected yet another CF Industries buyout bid.

CF Industries Holdings, Inc. announced on March 30 that its board of directors has recommended that CF Industries stockholders reject Agrium Inc.’s revised offer to acquire all outstanding shares of CF Industries.

Agrium Inc. increased its offer on March 27 to acquire all of the outstanding shares of CF Industries Holdings, Inc. CF stockholders will now receive $35.00 in cash, an increase of $3.30, or 10.4 percent, in the cash consideration, as well as one common share of Agrium for each CF share.

Following a review of Agrium’s offer with management and its legal and financial advisors, the CF Industries board of directors concludes that Agrium’s offer is grossly inadequate, substantially undervalues CF Industries, and is not in the best interests of CF Industries and its stockholders.

"Our board and management team are committed to providing superior value to our stockholders. We strongly believe that continuing to pursue our long-term strategy, including our proposed business combination with Terra Industries, is the best way to do so," said Stephen R. Wilson, chairman, president, and CEO of CF Industries.

"We are confident that both our stockholders and Terra’s stockholders support our proposed business combination,” said Stephen Wilson. “We believe the Terra stockholders will show their support by voting for our proposed slate of directors at Terra’s Annual Meeting, which is required to be held by May 15 under the Terra by-laws."

Mike Wilson, Agrium’s president and CEO, said, "Agrium’s increased offer reflects our firm commitment to completing this transaction. For CF stockholders — who would receive a substantial premium plus significant participation in the upside of the combination — our offer is a far better alternative than paying a substantial premium for Terra Industries. Moreover, we would consider increasing our offer further to reflect any additional value that the CF Board and management can demonstrate arising from the combination of our two companies."

Mike Wilson continued, "We do not understand why CF would summarily reject our offer without any attempt to negotiate a mutually beneficial transaction. We are disappointed that CF would attack our offer with selective information and flawed financial analysis — and disenfranchise CF stockholders by restructuring the Terra offer to take the vote away from CF stockholders. We urge CF stockholders to send a message to the CF Board to engage with us by withholding their votes for the CF nominees at the April 21 Annual Meeting and tendering their shares into the Agrium offer. Given CF’s end run around CF stockholders, withholding votes on directors and tendering shares is the way for them to have a voice in the future of their company."

Meanwhile, Terra Industries rejected CF Industries third offer, which was tendered March 23. A March 24 letter from Terra Industries Michael Bennett, president and CEO and Henry Slack, board chairman, to Stephen Wilson stated that the company’s board of directors “has unanimously concluded that this most recent version of your proposal continues to run counter to Terra’s strategic objectives, substantially undervalues Terra both absolutely and relative to CF, and would deliver less value to our shareholders than would owning Terra on a stand-alone basis.